Treasury secretary John Fraser will be devastated if an apparent leak of the Turnbull government's proposed bank levy prior to the budget came from his department.
The value of bank shares tumbled $14 billion prior to Treasurer Scott Morrison announcing on May 9 the $6.2 billion levy that will hit Australia's big five banks.
Mr Fraser on Monday told a Senate hearing he became aware of a news story pre-empting the announcement during the budget lock-up.
He phoned Australian Securities and Investments Commission chairman Greg Medcraft the following morning.
ASIC has since involved the Australian Federal Police, while Treasury has also conducted an internal review.
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"I would be devastated if the leak came from Treasury," Mr Fraser told senators.
Revenue from the levy has been brought into question after the big four banks estimated it would raise less than $1 billion after tax in the first year.
Mr Fraser said his department was still undertaking a confidential process with the banks but saw no reason to revise Treasury's revenue forecasts.
It was a complex issue that took into account timing of payments, the implication of dividend payments and interactions between the banks.
Treasury discussed the design of the levy over several weeks in the lead-up to the budget.
Labor has previously accused the government of rushing through the measure, but the hearing was told there were consultations with the Australian Prudential Regulation Authority and Reserve Bank which started as far back as March.
"We talked with the regulators well in advance of the budget," John Lonsdale, Treasury's deputy secretary for its markets group, told the hearing.
It heard the government plans to introduce legislation to parliament this week.
